“Continued Oversight of the Implementation of the Wall Street Reform Act”
WASHINGTON, D.C. – December 6, 2011 – (RealEstateRama) — Chairman Johnson, Ranking Member Shelby, and members of the Committee, thank you for the opportunity to discuss Treasury’s progress implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act).
The Dodd-Frank Act is the strongest set of financial reforms enacted since the Great Depression, and was passed in the wake of the worst financial crisis this country has experienced since that time.
Tougher constraints on excessive risk-taking and leverage. To lower the risk of failure of large financial institutions and reduce the damage to the broader economy if a failure occurs, the Dodd-Frank Act provides authority for regulators to impose more conservative limits on risks that could threaten the stability of the financial system.
An orderly liquidation authority to protect taxpayers. The Dodd-Frank Act creates a new orderly liquidation authority to break up and wind down a failing financial firm so that taxpayers and the economy are protected.
Comprehensive oversight of derivatives. The Dodd-Frank Act creates a new regulatory framework for the over-the-counter (OTC) derivatives market to increase oversight, transparency, and stability in this previously unregulated area.
Stronger consumer protections. The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) to concentrate authority and accountability in a single federal agency for consumer financial products and services.
Increased transparency and market integrity. The Dodd-Frank Act includes a number of measures that increase disclosure and transparency in financial markets, including new reporting rules for hedge funds, trade repositories to collect information on derivatives markets, and improved disclosures on asset-backed securities.
Accountability for stability and oversight across the financial system. The Dodd-Frank Act created the Financial Stability Oversight Council (the Council) to identify risks to the financial stability of the United States, promote market discipline, and respond to emerging threats to the stability of the U.S. financial system. To support the Council, the Office of Financial Research (OFR) collects and improves the quality of financial data and develops tools to evaluate risks to the financial system.
- the Volcker Rule;
- rules for designating non-banks and financial market utilities for enhanced supervision and prudential standards;
- rules governing the orderly resolution of large failing financial firms;
- the majority of OTC derivative market regulations;
- risk retention requirements;
- reporting requirements for large hedge fund and private equity funds;
- and rules enhancing protections for investors.